Headquartered in Brampton Ontario, Canada, Loblaw Companies is a supermarket chain with numerous stores across Ontario and Quebec. In western Canada, Loblaw operates as Real Canadian Superstore.

Loblaw Companies (L.TO) The company's 2012 annual report included the following:

Required

a. In common language, explain what is a restructuring provision. When do companies create such provisions?

b. What amount is included on the 2012 balance sheet for total provisions?

c. What amount is included on the 2012 income statement related to total provisions?

d. What is meant by "Payments" in the table? What sort of costs does this entail?

e. What is a reversal and how do they occur?

Transcribed Image Text:

Provisions consist primarily of amounts recorded in respect of restructruing, self-insurance, commodity taxes, environmental and decommissioning liabilities and oneous lease arrangements. The following are continuities relating to the Company's provisions: (millions of Canadian dollars) Provisions, beginning of year.. Additions Payments. Reversals Provisions, end of year.. (millions of Canadian dollars) Recorded on the consolidated balance sheets as follows: Current portion of provisions... Non-current portion of provisions.. Total provisions... 2012 $ 85 80 (20) (8) $137 2012 $78 59 $137 2011 $105 56 (50) (26) $85 2011 $ 35 50 $85